Asset Flows Update

Hedge funds helped protect investors from the equity market turmoil in September, declining 2.2% during a volatile month that saw the S&P 500 decline 9.3%. Despite the relative outperformance, hedge fund industry AuM declined for the sixth consecutive month, falling $36.8bn, which extended the YTD decline to $178bn. Europe ($18.7bn) accounted for most of the AuM decline, driven by rising risk-off sentiment as the European Central Bank moved to raise interest rates by 75bps to combat soaring inflation, which hit a record high of 10% in September. By strategy, long/short equity hedge funds posted the largest AuM decline of $16.5bn, driven by net outflows of $8.1bn as investors seek safe-haven assets amid rising interest rates and a bearish stock market. CTA/managed futures hedge funds bucked the overall negative trend to post an AuM growth of $3.3bn as performance-based growth remained resilient at $3.7bn despite the challenging market conditions.

Asset flows data since January 2021

Key highlights for September 2022:

  • Hedge fund industry AuM declined for the sixth consecutive month in September, falling $36.8bn.
  • The industry recorded $16.1bn of performance-based losses and $20.7bn of net outflows.
  • By strategy, long/short equity (-$8.1bn) posted the largest outflows in September.
  • CTA/managed futures is the only strategy to post positive flows YTD. Hedge funds have experienced $128bn in net outflows YTD.

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